Canadians approaching retirement with totally inadequate savings, seniors’ poverty rates increasing: new study



OTTAWA — The value of retirement assets of those aged 55 to 64 without an employer pension - representing about half in this age cohort in Canada - is wholly inadequate, with a median value of only $250 for those earning between $25,000 and $50,000 and $21,000 for those with incomes in the $50,000 and $100,000 range, a new study has found.

An Analysis of the Economic Circumstances of Canadian Seniors, authored by statistician Richard Shillington of Tristat Resources and released by the Broadbent Institute, also shows the Old Age Security (OAS) and Guaranteed Income Supplement (GIS) guarantee levels are falling behind and trends in income sources for seniors suggest that high poverty rates among seniors will further increase. The poverty rates for single seniors are already high, especially for women with a rate of nearly 30 per cent.

Already, the spread between the OAS/GIS guarantee levels and the low-income measure for 2015 – the spread that seniors need to fill using the Canada or Quebec Pensions plans (CPP/QPP), private pensions and private savings – is about $5,600 for single seniors and $4,700 for couples. And the overall median value of retirement assets of those aged 55 to 64 with no accrued employer pension benefits (representing 47% of this age cohort), is just over $3,000.

“This new data on retirement savings and gaps in support makes one thing perfectly clear - we have a retirement income crisis on our hands that requires urgent government action now,” said Rick Smith, Executive Director of the Broadbent Institute. 

Other key findings include:

  • Among those aged 55 to 64 with no accrued employer pension benefits, roughly half have savings that represent less than one year’s worth of the resources they need to supplement OAS/GIS and CPP/QPP.
  • Among this group, 32 per cent have less than $1,000 in retirement savings. About 23 per cent have more than $1,000 but less than one year’s savings. Fifteen per cent have enough for one– 2.5 years, 13 per cent have enough for 2.5 – 5 years, and only 18 per cent have more than five years worth of savings.
  • Only a small minority (roughly 15 to 20 per cent) of middle-income Canadians retiring without an employer pension plan have saved anywhere near enough for retirement and the vast majority of these families with annual incomes of $50,000 or more will be hard pressed to save enough in their remaining period to retirement (less than 10 years) to avoid significant fall in income.
  • Among single persons over 65 without pension income, the median income is under $20,000.
  • The seniors’ poverty gap is $2.5 billion in aggregate annually due to the 719,000 poor seniors, including 469,000 singles and 250,000 living in an economic family. A simulation using Statistics Canada’s Social Policy Simulation Database and Model found if the government acts on a campaign commitment to increase GIS by 10 per cent for single seniors, this would cost $700 million and would remove about 85,000 single seniors from the poverty rolls – leaving 634,000 seniors living in poverty.

 “These findings raise serious questions about the policy needs for future pensionless cohorts, such as the adequacy of benefits from Old Age Security, the Guaranteed Income Supplement, and the Quebec and Canada pension plans,” the report states.

“The panoply of public policies offering ‘voluntary’ options for saving - such as RRSPs, TFSAs, group RPPs, and the most recent Pool Registration Pension Plans - have demonstrated their inadequacy to address the shortcomings in declining workplace pensions and a Canada Pension Plan with limited benefits,” the study concludes.

Added Smith: “Our new study shows now isn’t the time for Ottawa and the provinces to punt on expanding CPP. In fact, we need federal leadership to make this happen. Boosting the GIS by 10 per cent for single seniors is a start but not nearly enough.”

The report is available online at


For more information or to arrange an interview, please contact:

Sophie Nadeau, Sophie Nadeau Media Consulting, or Sarah Schmidt, Director of Communications, Broadbent Institute, 613-857-2814; sschmidt[at]broadbentinstitute[dot]ca.